The next phase of AI is bullish for these three stocks

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Today’s issue in preview:

• The next phase of AI is bullish for these three stocks.

• This bet on AI power consumption is poised to run higher. Are you on board?

• Our recommendations in Genomics, Cybersecurity, and Trade Schools continue to pay off.

• Learn our Top Themes to buy now.

The next phase of AI is bullish for these three stocks.

Credit: Petrovich9

How big is the market for super intelligence?

How much demand is there globally for instant access to super genius doctors, super genius lawyers, super genius software developers, super genius financial advisors, super genius engineers, super genius marketers, super genius accountants, and so on?

When entrepreneurs and business executives try to generate interest in their companies, they often cite how large their TAM – or “Total Addressable Market” – is.

When it comes to TAM, bigger is better. A typical investor gets more excited about investing in a company with a $200 billion TAM than one with a $5 billion TAM.

You’re going to serve the $250 billion+ U.S. beverage market? Great. Big TAM.

You’re going to serve the Asian grocery market in Burlington, Vermont? Not so great. Small TAM.

So, what is the TAM for super intelligence, aka AI?

Since a large portion of the $126 trillion annual global GDP consists of paying lots of money to elite lawyers, consultants, executives, project managers, doctors, software engineers, financial advisors, accountants, and business analysts, I’m comfortable saying the TAM for super intelligence over the next decade is north of $100 trillion.

We are talking about a colossal TAM.

We’re talking about a technology that will yield many of the largest financial “jackpots” in the history of capitalism.

For practical purposes, we can say the demand for super intelligence is so colossally large that it is essentially infinite.

This is what the world’s smartest, most informed, and wealthiest technologists know… which is why they are in a great race to build the world’s most useful AI infrastructure and programs. It’s why they are conducting the largest collective investment effort of all time.

When you boil away all the fluff and bluster and extraneous details from the AI discussion, what we are left with is the core, foundational issue…

A world of advanced AI is a world of abundant and ubiquitous super intelligence. Since applied intelligence is the engine of innovation and human progress, the demand – the TAM – for super intelligence in all industries in all countries is so large that it is essentially infinite.

I believe this is what the extremely smart, extremely well-informed people that run Google (GOOG), Meta (META), Nvidia (NVDA), OpenAI (private), Palantir (PLTR), Anthropic (private), Microsoft (MSFT), SpaceX (SPCX), Apple (AAPL), and Amazon (AMZN) see when they look into the future.

They see that demand for intelligence – the one thing that has allowed us to go from living in caves to walking on the moon – will be so large that it is essentially infinite.

This is what the AI bulls see that the AI bears do not see.

This is a big deal so let’s go over it again: The TAM for super intelligence over the next decade is so large that it is essentially infinite.

Think about that for a minute.

Think twice on how bullish you are on AI and the ripple effects it will have on the world.

Goldman Sachs is bullish on AI and AI infrastructure. In May, the investment bank published a report on how this megatrend is creating investment opportunities in optical networking.

Optical networking is a set of computing technologies that convert electrical signals into light and transmit those signals through fiber optic lines. It allows for incredibly fast, incredibly efficient data transfer, which is critical in AI data centers.

As I’ve covered in the past, demand for this technology in AI infrastructure is driving a big bull market in optical networking giants Lumentum (LITE) and Coherent (COHR).

In its May report on optical networking, Goldman stated that it believes the multi-year AI infrastructure buildout will potentially drive a 9X increase in the market for optical networking equipment and services. This long-term megatrend means Lumentum and Coherent are set to enjoy even higher prices ahead.

It’s also bullish for smaller players in the optical networking industry. If you’d like to invest in the optical networking megatrend via smaller, higher-risk, higher potential upside stocks, companies to consider include:

Applied Optoelectronics (AAOI) is a $10.8 billion market cap firm. It designs and manufactures optical transceivers – the devices that plug into AI data center switches and servers to convert electrical signals into light and transmit them at speed. Its major customers include Microsoft and Oracle (ORCL). The company recently reported 51% year over year quarterly revenue growth.

POET Technologies (POET) is a $1.6 billion company that is trying to create a new way of building optical networking hardware. Today, assembling an optical transceiver is like building a watch by hand. Tiny components must be placed and aligned individually, one by one. It’s slow, expensive, and harder to scale. POET’s answer is to replace that hand assembly process by printing all the components directly onto a semiconductor wafer.

The risk with POET is that, unlike a company like AAOI who has named hyperscalers backing its revenue forecasts, POET’s customer relationships are still unnamed. This makes it a very early-stage bet but potentially one with large upside.

nLIGHT (LASR) is a $3.5 billion market cap company that designs and manufactures lasers. The lasers are the upstream components that feed into the entire optical networking supply chain. It also operates in the aerospace and defense market, a business segment that has been the key driver of a lot of its $261 million annual revenue. This makes LASR a stock to invest in two strong themes – defense tech and optical networking.

Demand for super intelligence that AI will provide to billions at low cost is poised to be so large as to be essentially infinite. This is why the world’s smartest, most informed technology executives are investing colossal sums into AI infrastructure that will make it all happen. This spending has driven a bull market in optical networking stocks that we believe will continue for years.

This bet on AI power consumption is poised to run higher. Are you on board?

Credit: RelaxFoto.de

On June 30, the giant infrastructure firm Brookfield Asset Management announced it has agreed to “supercharge” its financing agreement with fuel cell maker Bloom Energy (BE) from $5 billion to $25 billion. The partnership aims to deploy Bloom’s technology to get AI data centers up and running as fast as humanly possible.

The pair’s initial agreement was reached in October 2025, but this abrupt and massive increase shows just how quickly money is flowing into one of the AI boom’s most important parts: Electric power.

Avid Money & Megatrends know that AI Power Consumption is one of our highest conviction long-term bets. Thanks to AI’s enormous promise, giants like Google, Meta, Microsoft, and OpenAI are conducting the largest collective investment effort in history.

They’ve already spent more than a trillion dollars on AI data centers, AI chips, and other infrastructure components. They are on pace to spend over $700 billion in 2026… with more than $3 trillion to follow.

All that AI infrastructure is poised to consume colossal amounts of electricity. Goldman Sachs forecasts global data center power demand will surge 220% by 2030 compared to 2023 levels. U.S. data centers already account for 7% of U.S. electric power consumption, a figure that is expected to rise significantly.

Given this outlook, AI companies and their power providers are spending heavily to expand nuclear power capacity.

Nuclear provides “always on” carbon-free baseload power. Bloomberg reports that surging nuclear demand will drive $350 billion in U.S. spending by 2050.

This “Nuclear Renaissance” theme depends on uranium as fuel. Demand for uranium is soaring, but supplies are constrained right now and will be for years to come.

You can get long on this theme in several ways. In the past, I’ve mentioned nuclear power equipment and service companies such as BWX Technologies (BWXT, specialized manufacturing), Mirion Technologies (MIR, nuclear facility monitoring), Centrus (LEU, uranium enrichment), and Solstice Advanced Materials (SOLS, uranium processing).

You can also take the “one-click, and you’re done” route with a uranium miner fund such as the Global X Uranium ETF (URA) or the Sprott Uranium ETF (URNM). Both funds own diversified baskets of uranium miners, and both hold large positions in blue-chip Cameco.

As you can see in the two-year URA chart below, uranium miners are in the confines of a multi-year uptrend.

Given AI’s growing power demands and nuclear energy’s bullish demand outlook, I’m confident this uptrend will continue generating shareholder gains.

Market Notes

• Our recommendation to invest in the genomics megatrend continues to pay off. Genomic testing/diagnostics firms Natera (NTRA) and Illumina (ILMN) reached new one-year highs today.

• Cybersecurity giant Palo Alto Networks (PANW) reached a new all-time high today. The stock is up 132% since our March 27 recommendation.

• For profit education firm Universal Technical Institute (UTI) – one of our ways to “profit from AI job displacement” – surged 2.2% to reach a new all-time high today.

• Banking giant Bank of America (BAC) reached a new all-time high today. This is a bullish economic signal.

Regards,

Brian Hunt
Editor, Money & Megatrends

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